- African leader cancels trip to U.S. over Ebola outbreak; Obama still plans summit
- Sarah Palin’s online channel hits snag when Stephen Colbert buys similar URL
- SWAT spends seven hours in standoff with empty home
- U.S. troops told not to eat, drink in front of Muslims during Ramadan
- Iran’s Rouhani: Israel, Islamic State are ‘tumors derived from the same origin’
- Rep. Tim Murphy: GOP knew HealthCare.gov would be an ‘unmitigated disaster’
- Political speak: Planned Parenthood dumps ‘pro-choice’ for ‘women’s health’
- U.S. attorney warns Cuomo not to interfere with anti-corruption probes
- Investigators reach Ukraine jet crash site
- Ohio gives Obama a thumbs down; Hillary Clinton tops GOP all-stars: poll
U.S. wary of Chinese bidder for bankrupt battery maker
Green grantee also is defense contractor
Question of the Day
Democratic and Republican politicians alike hailed the news in 2009 that U.S. battery maker A123 Systems had won a quarter-billion-dollar federal grant, but just three years later, the company finds itself bankrupt and the target of a buyout by a Chinese competitor.
The Massachusetts-based company filed for bankruptcy protection this year, setting the stage for an auction watched closely by Washington lawmakers and the Obama administration alike.
While the Obama administration has contended it should have a say in who takes over the company, the secretive auction held in the offices of a Chicago law firm started Thursday and ended with word that the winner was Chinese-based Wanxiang Group Corp.
Just weeks earlier, Democratic and Republican members of Congress had raised concerns about Wanxiang in a sharply worded letter to Treasury Secretary Timothy F. Geithner.
Among other concerns, the politicians said that little public information was available about the internal structure, governance and ownership of Wanxiang.
“This proposed transaction raises significant national security and public policy considerations that, if not appropriately addressed, would impair U.S. national security and threaten America’s innovation leadership and job creation,” said Rep. Bill Huizenga, Michigan Republican.
Mr. Huizenga said he was concerned in particular that A123 has multiple U.S. defense contracts worth millions of dollars, and he worried that sensitive military secrets could wind up in the hands of foreign agents.
“These contracts involve military vehicles, unmanned aerial and underwater vehicles, power grids, unmanned ground and portable power systems, high-energy lasers and advanced armor,” he said. “Should any adverse foreign agent working through Wanxiang gain access to these contracts, such access would be extremely detrimental to U.S. military operations.”
Under the proposed purchase, A123’s government contracting business would not go to Wanxiang but to another U.S.-based company, Navitas Systems.
But the situation did little to allay the concerns of Republican Sens. Chuck Grassley of Iowa and John Thune of South Dakota, who issued a joint statement Monday calling for a “full review” of the bankruptcy transaction by the Treasury Department, which also must approve the deal.
“In the end, the taxpayers will be left having to repay interest to China for a business that a Chinese company now owns,” the lawmakers said.
Still, the auction hasn’t been finalized, and the deal must be approved by the U.S. Bankruptcy Court in Delaware. A hearing has been scheduled for Tuesday. In addition, the federal government insists it should give its consent before any new ownership takes over, according to court papers.
In court filings, government attorneys say the Department of Energy, which awarded the grant to A123, is entitled to proceeds from the sale unless it gives consent to transfer assets to the buyer.
But a creditors committee filed papers late last week arguing otherwise.
“[The Department of Energy] has no better claim to the proceeds of the subject property than any other creditors,” the committee lawyers said.
© Copyright 2014 The Washington Times, LLC. Click here for reprint permission.
About the Author
Jim McElhatton is an investigative reporter for The Washington Times. He can be reached at email@example.com.
- Patent workers paid to exercise, shop, do chores: report
- Power outage at Tennessee VA reveals safety risks for patients, staff
- House federal records plan would prevent repeat of IRS email scandal
- Whistleblowers flood VA with lawsuits despite apology
- Outrage over $190M deal for troubled federal contractor USIS
Latest Blog Entries
TWT Video Picks
By Ted Cruz
Israel saves its enemies; Hamas endangers its friends
- Al Gore's climate-changers at EPA hearings foiled by cool temperatures
- Geraldo Rivera: Matt Drudge 'doing his best to stir up a civil war'
- Chicken pox outbreak puts illegal immigrant facility on lockdown
- GOP report sees ties between rich donors, green 'nonprofits'
- House votes to sue President Obama over claims of presidential power
- NAPOLITANO: Is the president incompetent or lawless?
- Lois Lerner hated conservatives, new emails show
- Israel surprised by Hamas tunnel network
- CRUZ: A tale of two hospitals: One in Israel, one in Gaza
- EDITORIAL: The real Lois Lerner exposed in newly released emails
Obama's biggest White House 'fails'
Celebrities turned politicians
Athletes turned actors
20 gadgets that changed the world